NEC 2020 Annual Meeting
President & CEO Message
by Board President Brian Menking and NEC CEO Varzavand "Avan" Irani
For the past 81-years, NEC has energized South Texas for a brighter tomorrow. Each year brings new challenges and opportunities for growth. No matter what situation we find ourselves in, NEC is here to support our members, empower communities, and keep the energy flowing. Our employees, staff, and board of directors utilize their talent, time, and dedication to fulfill the cooperative mission of bringing reliable, cost-effective electric service to our 32,120 members.
This year we celebrate our 81st Annual Membership Meeting in ways that have never been done before. With safety at the top of our priority list, the Board of Directors discussed at length options for this year’s Annual Membership Meeting. After careful consideration, the decision was made to host NEC’s first virtual Annual Membership Meeting. A virtual meeting allows our members to join in from the comfort and safety of their own homes and allows us to potentially reach a wider audience than ever before. As NEC continues to implement innovative solutions to meet the unique challenges the cooperative faces, we take this time to reflect on the success of 2019.
Financially, I assure you that NEC is stable and strong. For the 2019 year, our Cooperative received $108.5 million in operating revenues, similar to the 2018 operating revenues of $108.8. Seventy-two percent (72%) of 2019 revenues were used to purchase 1,353,459,115 kWh of power for NEC CE members. The cost of purchased power was up slightly more, at 2.28% over 2018’s cost.
One of the great benefits of NEC, is the ability to return Cooperative margins back to the members we serve. Our members are owners of the cooperative, we work for you, and with each decision we make, our loyal NEC members are top of mind. Through the efficient management of your contributions to your Co-op, your Nueces Electric Board of Directors approved the return of more than $700,000 in patronage capital back to its members in 2019, and another $6 million in Power Perks to NEC Co-op Energy power supply members, a total of $6.7 million returned to our members.
A note-worthy financial highlight for 2019 is the continued copper theft NEC and many other area utilities experienced. Last year, NEC experienced multiple cooper thefts resulting in 49,000 feet of copper stolen, valued at $108,193. These criminals are skilled at eluding law enforcement. Members are encouraged to be vigilant and if you see any questionable activity along power lines, please call 911.
Focused on our Members
Each day, NEC employees and your Board of Directors work toward supporting this Mission. Across our service area in 2019, an average of 81 employees worked a total of 164,901 hours to maintain more than 3,600 miles of power line to deliver the most efficient and reliable service possible. The average outage time throughout the system for NEC delivery service members in 2019 was two hours and 49 minutes.
We are excited to announce that NEC has launched our outage texting program. This service is a great resource for NEC members in the event of evacuations and when keeping track of power in the home is impossible. Now members will receive a text message with the exact time the power went out, as well as when the power is restored. This allows members to be aware of how long electronics such as the refrigerator and other devices were left without power. Members will also receive an estimated time frame of when power is expected to be restored. NEC is working on ways to further utilize this technology to better serve our members throughout our service districts.
Every three years, your board of directors conducts a review of our service districts, as required by the cooperative’s bylaws. Due to the retirement of District 5 Director, Maxine Stewart, and the tragic death of District 6 Director, Thomas Ermis in 2019, the decision was made to eliminate both director positions and remain with an eight-member board of directors. It was also decided by NEC’s directors to re-draw NEC’s district boundaries. The goal was to find the right balance. The board was careful to balance the need to make updates that meet a growing and ever-changing membership while making sure to protect our member’s rights. NEC reviewed the size of its Board of Directors relative to other cooperatives. The review revealed that reducing the Board size would more closely align with the number of directors of similarly sized cooperatives. This change will allow the cooperative to save operating costs and improve director accessibility. As a utility owned by those we serve, NEC is focused on the best interests of all our members.
Last but certainly not least, the Board of Directors would like to welcome Varzavand “Avan” Irani as NEC’s new Chief Executive Officer. Serving the members of NEC for 16-years, Avan has displayed the vision, and dedication needed to push the cooperative forward. As our new CEO, Avan supports the initiatives necessary to fulfill the cooperative mission, including guiding employees, staff, and members with strong and professional leadership. We are elated to have Avan lead the cooperative through the many exciting projects that lie ahead for NEC.
NEC Co-op Energy
As a division of the Cooperative, NEC Co-op Energy is NEC’s affiliate, not-for-profit electricity provider. NEC Co-op Energy celebrated many achievements last year. In 2019, NEC Co-op Energy relocated to South Corpus Christi after selling its old facility in Robstown, Texas in 2018. The new facility allows NEC Co-op Energy to be in the economic hub of the region and overall provides the means for better service to our members.
NEC Co-op Energy saw a 6.00% growth in accounts, the largest growth in new accounts seen in the past seven-years. This growth is largely due to digital advertising and word of mouth. As a local community partner, NEC Co-op Energy continues to provide a trusted brand with no gimmicks or contracts. NEC Co-op Energy’s $50/$50 new member referral program had 2,495member participants. Through the support of 541 NEC Co-op Energy members who donate to the Member-To-Member assistance program, NEC Co-op Energy was able to distribute more than $6,696 to area agencies in 2019 to help members pay their electric bills.
Last year, NEC Co-op Energy scored a 94 out of 100 on the American Customer Satisfaction Index, demonstrating a high level of satisfaction among U.S. household consumers. Another study, published by Esculent, a top human behavior and analytics firm, found that NEC Co-op Energy is the highest scored retail brand in Texas. Due to strong and lasting connections with our members, NEC Co-op Energy leads the way in top-scoring net promoter scores among the competition. The recognition does not stop there. In 2019, NEC Co-op Energy proudly received the Caller Times Best of the Best #1 Electricity Provider award for seven years running. We want to say thank you to our members. You are the heart of everything that we do, and your continued support is what truly makes NEC Co-op Energy the best of the best.
Our top priority at NEC is ensuring uninterrupted business continuity in the safest possible manner. Last year we held 53 weekly operations safety meetings and eight safety training days, which helped ensure that each employee thinks safety first. In 2019, NEC had three recordable and two lost time incidents. Each year, we work to increase the quality of our safety trainings and decrease safety incidents. Our priority is ensuring each and every employee to make it home safety to their families. NEC continues to provide hazard recognition training to encourage employees to always maintain safe practices and encourages reporting of all incidents, no matter how small so that preventative measures may be taken.
Following our cooperative principle #6, Concern for Community, Nueces Electric Charities Inc. awarded $110,750 to 23 local non-profit organizations in 2019. This includes an annual $24,000 donation to our signature project, HALO-Flight. Other 2019 recipients include Driscoll Children’s Hospital, Youth Odyssey, Inc., United Way of the Coastal Bend, Corpus Christi Education Foundation, Corpus Christi Metro Ministries, A Source of Hope, and many more.
Since 1997, Nueces Electric Charities has distributed more than $1.6 million in charitable giving to local community organizations in need. We want to say thank you to the members of NEC who participate in Operation Round-Up. Your generous donations help local non-profit organizations impact lives.
Looking Towards the Future
NEC is stronger than we have ever been. We are blessed with the community support, talented team, and strong leadership necessary to overcome any obstacle the cooperative may face. We will continue to successfully navigate constantly evolving technological advancements, political dynamics, and consumer demands. With every unique challenge that arises, we grow and adapt our strategies to better serve our members. We are here for you just as we have been for the past 81-years, and we are excited to build upon our current success, now, and in the future.